A give-and-take relationship: negotiating in the practice

September 15, 2008

It is just as important to create a supportive and friendly atmosphere in a negotiation so that continuous relationships can form, as well as a good reputation. Here are ten Commandments for carrying out a negotiation in the ophthalmology practice.

Key Points

Berwyn, PA-Although some negotiations still are done by lawyers in smoke-filled rooms, according to Robert Wade, most professional negotiations are not completely competitive and aggressive. It is just as important to create a supportive and friendly atmosphere so that continuous relationships can form, as well as a good reputation.

"Everything in fact is negotiable and every encounter virtually in your life is some form of negotiation," said Wade, a principal for Wade, Goldstein, Landau & Abruzzo, Berwyn, PA.

It may seem that some companies' contracts are non-negotiable such as Managed Care, but according to Wade, all terms and conditions are up for negotiation. Some are just harder than others to change.

"One of the key things you'll need to learn . . . is knowing when to shift the gears and when one transaction . . . shifts from one to the other," said Wade.

"The different levels of formality are anything from negotiating with your 16-year-old daughter to lawyers and mediators and negotiators," said Wade. "Personally when I'm doing negotiation one of the best things to do is to bring it down to a level of informality as much as you can because what you're trying to do in the long run is understand and get accomplished what it is that's on your agenda, and the way to do that a lot of times is to build bridges."

1 Articulate your goals: Negotiation can go south if one party doesn't understand the conditions. A successful outcome is when both parties walk away satisfied. If it is on bad terms, i.e., someone leaving the practice, people should be mutually unhappy, rather than one suing and taking the situation to court.The negotiation should be concrete, reasonable and measurable.

2 Know about yourself: "The better prepared you are, starting with knowledge of yourself, the better off the negotiation," said Wade.

This involves knowing your strengths and weaknesses. Everyone has hot buttons or issues that can be a distraction. Be aware of those so the competitor doesn't use that weakness to their advantage. Going through the strengths and weaknesses of the practice before going into negotiations will both prepare a physician and help to create more realistic goals.

3 Know the other guy: Analyze yourself but also analyze the other side. The best way to accomplish this is to ask. "Doctors, lawyers, anybody who's a professional has learned to love to talk, to a certain extent. If you can learn to listen, your negotiations will be far more successful," said Wade. "Silence is often the very best technique in a negotiation. Just simply ask, shut up, and let them talk."

This may seem like common sense. However, it requires discipline when negotiating, because it is easy to want to cut to the chase. Wade advises, that is the wrong thing to do. "Sometimes this is a dance, this is a process. It can be best advanced not by cutting to the chase but by letting it develop," he said.

4 Do research: Knowledge of the marketplace is easy to obtain in this information age. The Healthcare Group keeps a goodwill registry that has recorded every goodwill transaction in an ophthalmology practice for the past 20 years. That will give a great deal of information about the market when coming up with a ballpark range for transactions.

5 Ask questions: The negotiation will be most successful when a large amount of knowledge and understanding is obtained. Don't be afraid to ask the other side questions. They will most likely give the answer and sometimes more.

6 Find common ground: "In the course of asking questions, in the course of doing your research, you want to find common ground wherever you can," said Wade because it will help you find out what you don't need to negotiate.

"It also has the ability to take competitive negotiations and turn them into cooperative negotiations," said Wade.

This can be considered a good thing by allowing transactions to end quickly, however, getting too emotionally involved may result in a party giving away more than they should.

7 Know what you are dealing with: Find out what the other party thinks of the negotiation. Wade says you can always ask: "What do you think you are going to get out of this transaction?" Find out if it is a win-win or a competitive situation, then realize when it is time to change gears.

It's important to bring things back to a win-win after a competitive discussion. If that doesn't happen it will be harder to do transactions with that party in the future and other parties as well. Make sure to tell the other side what a wonderful job they did.

8 Use leverage: Many people just want transactions to be fair. Wade says to those people, "The marketplace is a cold place. It tells you exactly what you are worth and what you are worth is what you can get."

The best thing to do is to be fair and tell your worth. Use that leverage, but use it honestly, he warns.

9 Design an offer and acceptance strategy: It doesn't matter who is the first to make a condition, however, don't make a second condition right after the first.

"If you follow a first concession by an even bigger concession on the second round you have effectively signaled to your other party that you're willing to pay more, do more they really can't necessarily believe what it is that you are offering in the way of concessions," said Wade.

In doing so, the reality becomes that a deal will never be reached, according to Wade.

You are always in control of the yes or no. There is a walk-away point, which you must set for yourself.

10 Use your advisors: "In your business negotiations you will want to use lawyers judicially," said Wade.

A lot of transactions that involve employment transactions are better done as face-to-face interactions with no lawyers involved, but don't be afraid to use lawyers.

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